While new legislation continues to expand legalization, cannabis businesses are still limited by their federally illegal status. Banking and finances remain one of the top concerns for cannabis businesses. It makes challenging to purchase and process land to open a business or accept routine payments from their customers.
The industry will have to wait on clarification from the federal government before they can have full access to more traditional banking and payment methods. For now, these are the types of payment cannabis businesses can accept.
How Cannabis Businesses Can Legally Accept Payment
Currently, there are only a handful of ways that cannabis businesses can accept and process payments:
- Crypto or digital currencies
- Cashless ATMs for Debit Cards
These options are limiting and oftentimes complex, and there’s benefits and downsides to all of them.
Payment Types Pros & Cons
|Cash||Easy & accessible for most customers||Security issues with having an excess of cash on site |
Can be inconvenient for customers
|Cryptocurrencies||Secure & private way to make transactions Low transaction fees||Not enough people use it yet Need something else to process it (usually an app)|
|Cashless ATMs||Operate (looks and feels) like a regular credit card machine to customers Lower fees that can be charged directly to the customer||Customers are often charged an extra fee by their bank|
One of the biggest downsides to any of these payment options is they lack the legitimacy of “normal” businesses. The industry already has to combat the stigma’s associated with cannabis use. Offering them the ability to use all acceptable payment options, same as any other business, will continue to improve their image in the public eye.
Until the federal government passes laws to clarify financing, payments and processing for cannabis businesses, these are the options. In the meantime, new payment processing companies are emerging to help fill the gap and make these transactions easier.